Citi Urges Dealmakers to Send More Business to Private Bankers

Citigroup Inc.’s dealmakers have been keeping busy with family offices looking to get in on the blank-check frenzy. Now the lender wants to bring its private bank a piece of the action.

Citigroup encouraged its banking, capital markets and advisory business this week to begin cross-selling private-banking services to clients. Last year, the bank established a joint venture between the two divisions in the hopes of deepening ties with customers.

“Since then, our private-banking partners have brought us a number of opportunities that have resulted in joint successes,” Tyler Dickson and Manolo Falco, who lead banking, capital markets and advisory business globally, said in a memo to staff seen by Bloomberg. “Now we are hoping to send some opportunities the other way and deepen this partnership.”

They’re in luck: Citigroup’s dealmakers have been working with more and more family offices as they’ve been arranging special purpose acquisition companies, or SPACs, which go public to raise money from investors and then aim to merge with a private business.

“We’ve seen greater appetite from family offices and other sophisticated high-net-worth investors looking to gain entry into SPACs and other traditionally institutional investment-banking products,” Dickson said. “Tightening the synergies between our BCMA and private-bank platform makes sense.”

Citigroup’s private bank already caters to 1,400 family offices in more than 100 countries, along with a quarter of the world’s billionaires.

Newly minted Chief Executive Officer Jane Fraser has been seeking to ensure her bank’s many different business lines work together more. In January, the lender announced it would combine wealth-management and private-bank offerings.

When Citigroup first inked the joint venture between its investment bank and the private bank last year, it also crafted a revenue-sharing agreement to entice the two groups to collaborate.

Business that a private banker brings to the investment-banking group will result in the private bank receiving a referral fee equal to one-quarter of the immediate revenue from the transaction. Similarly, the investment bank will receive 25% of the revenue earned over three years from a relationship it brings to the private bank.

“Both BCMA and Citi Private Bank remain united in their belief that there are many great opportunities out there to cross-sell, to seek out opportunities together,” Dickson and Falco said in the memo this week. “So take this opportunity to call your contacts.”

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